Insurance TV Commercials

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After years of “Nothing Matters But Price” TV commercials from GEICO and Progressive Direct, it’s refreshing to see some insurers focusing on coverage, not price. In a way, it’s like a public service announcement that, no, insurance is NOT a commodity where the only difference is price. Kudos to carriers like Farmers, Liberty Mutual, and Allstate for providing coverage-based claim scenarios that make this point.

HOWEVER…

One suggestion I have for many of these commercials is for the advertising agencies and PR firms to clear their commercial ideas with each carrier’s claims department before investing a lot of money in producing a commercial that might be factually (from a coverage standpoint) inaccurate.

Take, for example, the Farmers gopher thief commercial. In this commercial, an amorous gopher “steals” a diamond ring to give to his burrow-mate. According to the commercial, this was a real claim that was paid on April 26, 2014. I have a copy of several Farmer’s HO policies. On a named perils basis, there is coverage for theft; however, most courts have found that animals are incapable of “stealing” or vandalizing property…this usually involves some sort of criminal mindset. On an open perils basis, the policies I have exclude loss caused by “rodents.”

So, could the ring have been scheduled by endorsement? Possibly, though the commercial doesn’t say so, perhaps implying that the unendorsed policy provides coverage. I don’t have a copy of whatever endorsement Farmers uses to schedule jewelry, but if it’s like ISO’s HO 04 61 form, it likely covers this since the only relevant exclusion for this type of loss would be if the gopher is considered a “vermin” and courts have generally found that “vermin” is an ambiguous term.

Two other Farmers commercials involve dogs, one where the dog causes a fire and another where dogs flood the house by turning on a sink faucet. The Farmers HO policies I have exclude damage to the dwelling caused directly OR INDIRECTLY by “domestic animals” like dogs. In the fire commercial, Standard Fire Policy states or those that follow the proximate cause doctrine might statutorily impose coverage, but it’s possible that the exclusion could be enforceable in other states. In the water damage commercial, the policy excludes loss caused by “domestic animals” but covers accidental discharge for water from a plumbing system. Covered? Probably but, even more to the point of this post, almost certainly given that Farmers is on record that this type of loss is covered.

One of the Allstate Mayhem commercials is based on a sports referee trying to escape an angry mob by deliberately driving through fences, shrubs, etc. Auto policies usually cover accidents. Does this constitute an accident? Not from my viewpoint, but the implication of the commercial is that deliberately damaging property in your auto, perhaps depending on the circumstances, is covered. On the other hand, many of these commercials are based on scenarios that imply that many policies wouldn’t cover the damage but the reality is that most would.

So, maybe carriers advertising coverage advantages should very carefully vet the accuracy of their commercials. That being said, I still say hats off to these carriers for making consumers aware that there is more to their insurance purchasing decision than just price.

Bill Wilson

Founder at InsuranceCommentary.com

One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America.
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4 Comments

Great article Bill! It’s great that after a decade of price based commercials which convinced the public that personal lines insurance is a commodity (which it isn’t) we’re finally seeing some coverage based commercials. It’s very sad that the marketers aren’t checking with claims and underwriting to make sure they’re being accurate, but it is a step forward. Here’s an idea on how we should evolve our ads in the future: https://insnerds.com/sleeping-enemy-might-way-save-personal-lines/

Every time I watch one of the Farmer’s commercials, I always wonder why they use claims scenarios that are most likely not covered at all. Also, the ones that are for “accident forgiveness” do not tell you that you have to pay for that forgiveness. Very misleading!

Allstate ran a commercial some 6 or 7 years ago that showed a family of raccoons that had burrowed into the roof of a home and were living in the attic. I recall a lively discussion at a Rubles Seminar on whether or not the vermin exclusion would apply to that loss. Most, including the instructor, believed the exclusion would apply.

And regarding the gopher: gophers are rodents. So I think the exclusion would almost certainly apply.

Sean, if you have access to the Big “I” Virtual University, there is an article about vermin…just search the VU for that word. It also discusses raccoons and that might be addressed in another article as well. When I did the research for the vermin article, I could not find a single court of appeals or supreme court case that upheld an exclusion for vermin (other than where the vermin were rodents and insects, something already specifically excluded by most policies). Over the years, I got several raccoon claims covered after an initial denial using that article.

However, the 2011 ISO HO-3 got rid of the word “vermin” and replaced it with an exclusion for nesting, infestation, secretion, etc. by any animal. By that change, the damage you describe would likely be excluded.

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